"Al Qaeda's extreme, Taliban-like ideology and deliberate disregard for human life has led to its rejection by the Iraqi people," Smith said.

In a recorded message titled "The Way to Foil Plots," bin Laden reportedly admonished Sunni Arabs who have undermined al Qaeda by embracing coalition security initiatives, The Guardian reported today. The terrorist chief allegedly urged al Qaeda operatives to turn against leaders in Anbar and other Iraqi provinces where cooperation with coalition forces is widespread.

In a rejection of extremist ideology, Iraqi tribal leaders and citizens have spurned al Qaeda and continue to drive terrorist members out of their communities, Smith said.

"The real plot foiled is al Qaeda in Iraq and bin Laden's plot to turn Iraq and the region into a caliphate based on the radical Taliban ideology," he said. "These actions by the tribes and volunteer citizens have become a central concern for al Qaeda, and bin Laden attempts to rationalize these setbacks but ignores the most relevant fact: that the tribes and citizens have rejected (al Qaeda in Iraq's) ideology and hatred."

Meanwhile, coalition and Iraqi security forces will continue to pursue and disrupt al Qaeda and prevent the group from reestablishing safe havens and operating bases in Iraq, Smith said.

Security efforts are being bolstered by an Iraqi court system that tried some 4,000 civil and criminal cases in 2007 and boasts more than 1,100 judges, prosecutors and examining magistrates in dozens of courts operating across the country.

An Iraqi court on Dec. 27 found Muhammad al Matyuti guilty of participating in bombings that killed some 500 Iraqis from the Yazidi tribe in August. Matyuti confessed to being a member of the Sinjar al Qaeda in Iraq network and an associate of Muhammad al Afri, the Yazidi-attack mastermind who coalition forces killed during a targeted raid in September, Smith said.

Economic stimulation also is aiding coalition forces in countering extremism in Iraq, Smith said. Earlier this month, Multinational Corps Iraq distributed micro-grants to several local Baghdad businessmen. With the loans, a market owner, butcher and street vendor were able to purchase equipment necessary to conduct their respective trades while stimulating local economies.

"Though small in nature, micro-grants such as these are enabling thousands of businessmen and businesswomen to both maintain and expand their entrepreneurial spirit, providing not only a livelihood but essential services in their neighborhoods," Smith said.

Though challenges to security loom in the new year, Smith said, such economic developments are leading to a brighter outlook in Iraq.

"Positive elements such as these are encouraging, as Iraqis continue to dedicate themselves to the building of their country from the bottom up," he said. "2008 will have its own set of upturns and downturns, but we remain positive that the progress will continue as the new year unfolds."